Warwickshire-based car giant Jaguar Land Rover is to axe 450 jobs, including 300 managers, as part of a cost-cutting exercise, the company has announced.

The cuts, including 150 agency staff, follow the "severe reduction" in demand for new cars, said the company.

Jaguar Land Rover also announced that managers will not receive any bonuses this year, while pay rises have been deferred to October.

The company said it had started consultations with employee representatives on the proposed redundancy programme, adding: "Clearly these choices are very difficult. No company wants to lose skilled and experienced employees in any condition. Throughout the process we will ensure employees are treated with dignity."

Chief executive David Smith said: "It is only right and proper that our response to the unavoidable impact of the credit crunch and a severe reduction in demand includes actions across all grades and functions in the company.

"We don't expect sales conditions to return to normal levels for some time. If we are to continue to fund and invest in the products and technology that we will need to be successful when customer demand picks up again after the recession, then we have to improve our efficiency and costs, to improve our ability to respond to the marketplace.

"It is critical that Jaguar Land Rover becomes a more efficient and dynamic organisation to face up to the challenges that we will meet in the years ahead."

The firm, based in Gaydon, has 15,000 employees with plants in Coventry, Solihull, Castle Bromwich and Halewood on Merseyside.

Jaguars are made at Halewood and Castle Bromwich, while Land Rovers are produced at Halewood and Solihull. A wood veneer plant at Coventry supplies both marques, while the company has two research and development centres in Coventry and Gaydon.

Managers are spread across all the sites. The annual Christmas shutdown was extended this year because of the cut in sales, with production only resuming this week.